North American Summary and Highlights 8 May
Overview - The highlight of a quiet session was modest SEK losses after a 25bps Riksbank easing.
North American session
In a session with little news the USD was little changed. USD/JPY held from around 155.60 while EUR/USD was neutral near 1.0745. GBP/USD and AUD/USD were marginally firmer with EUR/GBP slipping back below .86. EUR/CHF also saw marginal losses. USD/CAD lost 30 pips to 1.3730. Fed’s Collins suggested rates would remain higher for longer.
European morning session
EUR/USD and USD/JPY both gained around 10 pips through the European morning. The EUR was helped a little by the German industrial production data which showed a slightly smaller than expected 0.4%b m/m decline. There were downward back revisions which meant the data was much as expected, but it still means a strong Q1 gain in production, underpinning expectations of a German and Eurozone recovery.
The SEK lost ground after the Riksbank cut the policy rate to 3.75%from 4.0%, although the decline was modest as the cut was generally expected. EUR/SEK hit a high just above 11.75, but settled back to 11.73, around 3 figures higher on the day. The Riksbank also indicated a fairly dovish outlook with another 50 bps of easing projected by the end of the year.
Most other pairs were not much changed against the USD, with the EUR making small gains against GBP, with EUR/GBP reaching its highest since April 23 at 0.8615.